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How the AfCFTA fits into Africa’s existing regional integration scheme


How the AfCFTA fits into Africa’s existing regional integration scheme

How the AfCFTA fits into Africa’s existing regional integration scheme

The AfCFTA Agreement is defined as “this Agreement Establishing the African Continental Free Trade Area and its Protocols, Annexes and Appendices which shall form an integral part thereof”.[1] The AfCFTA is a member-driven FTA, not a CU, and has no supra-national institutions.[2] It will not replace the RECs which have already formed FTAs, CUs, or common markets. It will exist alongside them and will preserve the acquis,[3] meaning what has already been achieved in terms of regional integration, remains binding.[4]

The co-existence feature of the AfCFTA is spelled out in provisions such as Article 19(2) of the AfCFTA Agreement:

State Parties that are members of other regional economic communities, regional trading arrangements and custom unions, which have attained among themselves higher levels of regional integration than under this Agreement, shall maintain such higher levels among themselves.

Article 8(2) of the AfCFTA Protocol on Trade in Goods provides as follows:

State Parties that are members of other RECs, which have attained among themselves higher levels of elimination of customs duties and trade barriers than those provided for in this Protocol, shall maintain, and where possible improve upon, those higher levels of trade liberalisation among themselves.

There are multilateral rules too to be considered. When WTO members form regional trading groups, they provide preferences only to one another. This amounts to a violation of the MFN rule of the GATT, unless the requirements of Article XXIV, or the Enabling Clause, are met. As an FTA the AfCFTA must also comply with the multilateral requirements for regional trade arrangements, as well as Article V GATS. The latter applies to regional services trade arrangements. Most African States are WTO members and the AfCFTA has to be notified to the relevant WTO structures. In notifying their new regional trade arrangement the parties must specify under which WTO provisions it is notified.

Because of its high level of ambition, its comprehensive geographical and substantive coverage, and its detailed obligations, it appears that the AfCFTA will be notified under Article XXIV GATT.[5] (Notification to the WTO has not yet happened.[6]) The Enabling Clause permits “regional or global arrangements entered into among less-developed contracting parties for the mutual reduction or elimination of tariffs and... non-tariff measures, on products imported from one another”. It does not require that substantially all trade should be liberalized and there is no requirement for an indicative timetable.[7]

To be consistent with Article XXIV GATT, customs unions, free-trade areas, and interim agreements leading to the formation of a customs union or free-trade areas must satisfy, inter alia, the provisions of paragraphs 5 and 8 of that Article. The “reasonable length of time” for implementing an FTA referred to in paragraph 5(c) of Article XXIV should exceed ten years only in exceptional cases.[8] In cases where Members parties to an interim agreement believe that ten years would be insufficient, they must provide a full explanation to the WTO Council for Trade in Goods of the need for a longer period.

Article XXIV GATT defines an FTA to mean “a group of two or more customs territories in which the duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated on substantially all the trade between the constituent territories in products originating in such territories”. Article XXIV:8(b) specifies that duties and other restrictive regulations of commerce, such as non-tariff barriers (NTBs) should be eliminated on substantially all the trade between the constituent territories.

The implication is that the AfCFTA will have to eliminate tariffs and NTBs on substantially all goods traded amongst all African countries within a reasonable period of time. (Article 5:1 of the GATS has similar language that an agreement should have substantial sectoral coverage, which is defined in terms of the number of sectors, the volume of trade affected and modes of supply. Specifically, to meet this condition, agreements should not provide for the a priori exclusion of any mode of supply.[9]). And there must be RoO for all goods entitled to AfCFTA preferences.

When viewed against the background of these requirements as well as the intention to preserve existing African FTAs and CUs, it becomes clear that the AfCFTA negotiations on tariff reduction offers and tailor-made RoO for the goods traded under AfCFTA preferences, involve a very complex undertaking.

[1] Art 1 AfCFTA Agreement.

[2] Art 5(a) AfCFTA Agreement.

[3] Art 5(f) AfCFTA Agreement.

[4] The acquis concept was first used when the Tripartite Free Trade Area was negotiated. See AfCFTA Parallelism and the Acquis https://www.tralac.org/blog/article/15085-afcfta-parallelism-and-the-acquis.html

[5] Of the notification of the AfCFTA Deputy WTO Director-General Angela Ellard has said that it is important that such notification takes place “in line with standard transparency obligations”. https://www.wto.org/english/news_e/news21_e/ddgae_25nov21_e.htm

[6] Per Deputy WTO Director-General Angela Ellard in a statement highlighting the potential benefits of the AfCFTA, delivered in Nov 2021. https://www.wto.org/english/news_e/news21_e/ddgae_25nov21_e.htm

[7] Ibid.

[8] https://www.worldtradelaw.net/

[9] www.fao.org/3/y4793e/y4793e08.htm

About the Author(s)

Gerhard Erasmus

Gerhard Erasmus is a founder of tralac and Professor Emeritus (Law Faculty), University of Stellenbosch. He holds degrees from the University of the Free State, Bloemfontein (B.Iuris, LL.B), Leiden in the Netherlands (LLD) and a Master’s from the Fletcher School of Law and Diplomacy. He has consulted for governments, the private sector and regional organisations in southern Africa. He has also been involved in the drafting of the South African and Namibian constitutions. He grew up in Namibia.

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